By Nayrouz Talaat and Julian Nabil

Although the hospitality and tourism sectors across Egypt’s North Coast are seen at low rates, given the limited amount of hotels and tourism activities, experts believe that there are a host of new major projects in the pipeline expected to increase the region’s hotel supply and cater to tourists’ needs. Invest-Gate explores the hospitality and tourism sectors in the North Coast.

“The numbers of foreign tourists visiting the North Coast are  low, compared to other tourist destinations located in the Red Sea such as Hurghada, Sharm El-Sheikh, and Dahab but real estate developers are pinning hopes on the country’s new developmental projects that they say will help the tourism and hospitality sectors in the area flourish all year long,” CEO of Sakan Mohamed Tharwat, a real estate consultancy tells Invest-Gate.

The government is now paying due attention to the North Coast region as it has given the go-ahead for major projects such as El-Dabaa Nuclear Plant, New El-Alamein City, El-Alamein International Airport, as well as, paving new roads to link those areas to the capital.

According to local media, there are an estimated number of 3,000 hotel rooms along the North Coast, compared to around 62,000 rooms in South Sinai. Experts say that the North Coast should have a hotel capacity of at least 20,000 rooms if the area is willing to attract foreign visitors at the same rate of Red Sea destinations like Sharm el-Sheikh and Hurghada.

Future Projects

One of the major projects in the pipeline in the North Coast is Swiss-Belresort Marseilia Beach 4, which is owned by Marseilia Egyptian Gulf Real Estate Investment and managed by Swiss-Belhotel International (SBI). Located in Sidi Abd El-Rahman Bay, the 150 room hotel is scheduled for opening in 2020, according to SBI.

Estimated at an initial cost of EGP 3bn, the New El Alamein City project developed in Marsa Matrouh will be an addition to the North Coast, with its first phase including a tourism development, a residential area, and associated facilities, according to the Ministry of Housing, Utilities and Urban Development.

Hotel operator, AccorHotels, announced late last year the signing of management agreements with Egyptian real estate developer ARCO for four new hotels in the North Coast. Fairmont Fuka Bay is one of the projects, which will boast 250 rooms and 150 Fairmont-branded residences, with a plan to  open in 2019. Scheduled for opening in 2022, Swissôtel Fuka Bay is yet another project that will offer 300 rooms and 200 branded residences. The third hotel is the 250-room Novotel El-Alamein City, which will overlook the Crystal Lagoons and set to debut in 2018.

The hospitality sector will also be boosted by Hyde Park’s latest project, Coast 82, that spans over 1 million square meters in the North Coast, with total investments worth EGP 12.5bn. The project will comprise around 500 villas and 600 chalets, in addition to a commercial space and a five-star hotel with a seafront extending 550 meters, according to Hyde Park Developments CEO Amin Serag.

Challenges

Speaking about the challenges, Sakan CEO Tharwat says that the North Coast area still lags behind in infrastructure projects. “However, if the government moves ahead with all developmental projects there, the situation will be brighter during both the summer and winter seasons,” he adds.

For his part, Fathallah Fawzi, a real estate developer and expert, suggests that the government also offer more incentives to tourists in order to encourage them to visit the North Coast area. “Such incentives can include more competitive flight ticket prices, the establishment of more hotels and entertainment areas, as well as the increase of flights to the North Coast,” he tells Invest-Gate.

Efforts to revive foreign tourism and prospects for growth

In an attempt to support the hospitality sector and prevent further hotel closures, the government has taken a raft of measures over the past few months. This year, the government postponed the collection of outstanding hotel debts (such as taxes and utilities bills) until 2018, according to London-based research firm, BMI. Egypt’s plan to increase the visa on arrival fee to USD 60 back in March has also been postponed to early July.

The government targets to attract over 1 million tourists from China by 2020, a movement to rely less on visitors from European markets like Russia and the UK, the report adds.

In May, Marsa Matrouh welcomed the first charter flight with 116 Italian visitors on board, in addition to 137 Italian and 81 Ukrainian tourists in June, with a plan to increase the number of charter planes until October, Marsa Matrouh Governor Alaa Abu Zeid announced in a statement. The North Coast is served by four airports, in Alexandria, El-Alamein, Burj Al-Arab, and Marsa Matrouh.

Countries such as Germany, Poland, and Turkey that previously imposed a travel ban to Egypt, following the Russian passenger jet crash in Sinai in late October 2015 have resumed their flights, except Russia, which is still in place, while Britain advises travel to Sharm El-Sheikh only.

It seems that if the Egyptian government proceeds with its major developmental projects in the North Coast area, the tourism and hospitality map of this region would be remarkably improved thus attracting Egyptians and foreigners alike to the area.